Following a large swing in diesel prices in South Africa, petrol prices have now also moved into an over-recovery, but drivers can still expect a hike at the pumps next week.<\/p>\n\n\n\n
This is because the National Treasury’s fuel levy relief will start being phased out from June, reversing the recovery trend and pushing petrol prices back into the red.<\/p>\n\n\n\n
According to the latest data from the Central Energy Fund (CEF), petrol price recoveries have finally turned positive.<\/p>\n\n\n\n
Having started the month with an under-recovery of around 85 cents per litre, petrol prices are now showing an over-recovery of between 3 and 8 cents per litre.<\/p>\n\n\n\n
While this is a small over-recovery, it’s the first positive recovery after three consecutive months of steep increases.<\/p>\n\n\n\n
These are the recoveries at mid-month<\/p>\n\n\n\n
Unfortunately, the over-recovery is nowhere near big enough to offset the coming reintroduction of R1.50 per litre to petrol prices.<\/p>\n\n\n\n
This will be coming as the National Treasury starts terminating the R3.00\/litre fuel levy relief it introduced in April.<\/p>\n\n\n\n
From June, R1.50 per litre will be added back, with the full relief terminating in July, when the remaining R1.50 will be added.<\/p>\n\n\n\n
This will take the small cut on the cards for petrol and turn it back into another huge increase<\/strong>. <\/p>\n\n\n\n At the current recoveries, with the fuel levy added back at 50%, petrol prices are still expected to rise by over R1.40 per litre next week.<\/strong><\/p>\n\n\n\n A more positive outcome is on the cards for diesel users, where the over-recovery is so large that it can easily absorb the return of the fuel levy.<\/p>\n\n\n\n At current recoveries, taking the 50% fuel levy of R1.97 for diesel will keep prices in the black, with a R2.30-R3.00 cut still expected.<\/p>\n\n\n\n Some economists have posited that the steep over-recovery might prompt the National Treasury to take advantage and reintroduce the full levy (R3.93 per litre).<\/p>\n\n\n\n Even in that case, the recovery is big enough to fully absorb it, still yielding a 33-cent to R1.09 per litre cut at the pumps in June.<\/p>\n\n\n\n The table below outlines how the June fuel prices could be impacted by their return.<\/p>\n\n\n\n Petrol price recoveries have moved to a relatively neutral position on the back of a resilient rand, and oil prices are trading in a narrower range around $100 a barrel.<\/p>\n\n\n\n Because of this stability\u2014at least, relative to previous months\u2014recoveries have moved away from the steep under-recovery shocks in April and May.<\/p>\n\n\n\n This relative stability has continued, with the rand starting the week trading on the stronger side of its range on Monday (25 May) at R16.36 against the dollar.<\/p>\n\n\n\n The rand’s stronger position has been supported by easing oil prices. Local markets are also on watch for the Reserve Bank’s interest rate decision later this week.<\/p>\n\n\n\n Economists at Nedbank expect the monetary policy committee to raise interest rates by 25 basis points, taking the repo rate to 7%.<\/p>\n\n\n\n “Our analysis suggests that inflation expectations are particularly sensitive to petrol price increases, and we therefore see a relatively high risk of second-round effects,” the bank said.<\/p>\n\n\n\n “As such, tightening monetary policy now would ensure that the inflationary consequences of the supply-side shock are temporary and likely minimise the need for more severe tightening later in the cycle.”<\/p>\n\n\n\n Regarding oil markets, oil prices hit two-week lows on optimism that the US and Iran were moving closer towards a peace deal, even though both countries remained at odds over key issues.<\/p>\n\n\n\n On Saturday, US President Donald Trump said Washington and Iran had “largely negotiated” an understanding on a peace deal that would reopen the Strait of Hormuz.<\/p>\n\n\n\n The strait, which carried a fifth of global oil and liquefied natural gas shipments before the conflict, has been closed for months, driving up fuel prices.<\/p>\n\n\n\n The next fuel price changes will kick in from Wednesday, 3 June 2026. The Department of Mineral and Petroleum Resources will announce the official changes before then.<\/p>\n","protected":false},"excerpt":{"rendered":" Following a large swing in diesel prices in South Africa, petrol prices have now also moved into an over-recovery\u2014but drivers can still expect a hike at the pumps next week.<\/p>\n","protected":false},"author":10,"featured_media":858392,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[9874],"tags":[19909,2171],"class_list":["post-861373","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-diesel-price","tag-petrol-price"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/861373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=861373"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/861373\/revisions"}],"predecessor-version":[{"id":861394,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/861373\/revisions\/861394"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/858392"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=861373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=861373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=861373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}June projections<\/th> (Under)\/Over recovery
Mid-month<\/th> 50% Fuel tax added back in June<\/th> 100% Fuel tax added back in June<\/th> Projected change<\/th><\/tr><\/thead> Petrol 93<\/td> R0.08<\/mark><\/td> (R1.50)<\/mark><\/td> –<\/td> (R1.42)<\/strong><\/mark><\/td><\/tr> Petrol 95<\/td> R0.03<\/mark><\/td> (R1.50)<\/mark><\/mark><\/td> –<\/td> (R1.47)<\/strong><\/mark><\/td><\/tr> Diesel 0.05%<\/td> R5.02<\/mark><\/td> (R1.97)<\/mark><\/mark><\/td> –<\/td> R3.05<\/strong><\/mark><\/td><\/tr> Diesel 0.005%<\/td> R4.26<\/mark><\/td> (R1.97)<\/mark><\/mark><\/td> –<\/td> R2.29<\/strong><\/mark><\/td><\/tr> Diesel 0.05%<\/em><\/td> R5.02<\/mark><\/td> –<\/td> (R3.93)<\/mark><\/mark><\/td> R1.09<\/em><\/strong><\/mark><\/td><\/tr> Diesel 0.005%<\/em><\/td> R4.26<\/mark><\/td> –<\/td> (R3.93)<\/mark><\/mark><\/td> R0.33<\/em><\/strong><\/mark><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Markets flat<\/h2>\n\n\n\n